Sunday, November 27, 2011

New Jersey, like many other states, is investing our public money in private corporations to create jobs (hopefully not to garner favors). How is that strategy working in New Jersey?

According to Deborah Howlett of the New Jersey Policy Perspective, a non-profit organization, The Christie administration has committed 1.2 billion dollars in corporate tax subsidies over the past two years. For example, Goya received $82 million and Panasonic received $102 million to relocate their offices within the state while Campbell’s Soup received $34 million to renovate their offices. Those three tax give-a-ways will produce 475 jobs. Do the math and you find that it will cost taxpayers $459,000 for every job created. Another $261 million is going to help build a new gambling casino in Atlantic City, while school funding is being cut. All together this public investment in private companies will produce 51,000 jobs. This is about the same number of jobs lost in construction, manufacturing and the public sector. Howlett writes, “… only eight other states had a worse job-creation record last year than did New Jersey.

As Howlett points out, building schools employs the same number of tradesman as building casinos, and hiring teachers creates the same number of jobs as hiring casino workers. The money a teacher, or any public employee, spend from their paycheck has the same stimulative value on the economy as does a casino worker's spending. But in the end, doesn’t a public investment in schools, or green energy, or infrastructure result in a better public investment than does tax subsidies for private enterprises? New Jersey happens to have almost $4 billion in untapped bond capacity to rebuild our most run down schools (some of which are over 100 years old). It isn’t a question of not having resources to spend on public works. Putting taxpayer money to work on education, green energy or other public works projects puts just as many people back to work and has the same stimulus effect on consumer demand, but it also produces decades of added benefits in the form of a better educated population, cleaner renewable energy and more efficient and reliable transportation for New Jerseys products and people. What's happening in your state? Leave a comment here if you wish.